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Definition and measure

People in households with low incomes may have more difficulty meeting their material and non-material needs and experience economic hardship. Having insufficient economic resources limits people’s ability to participate in and belong to their community and wider society, which restricts their quality of life.

This indicator uses income thresholds to define the proportion of the population with low incomes. Incomes are before housing costs, and after adjusting for household size and composition. The thresholds used are set at 50 and 60 percent of median household disposable income from each Household Economic Survey.

Technical changes since 2010

Population with low incomes replaces the economic hardship indicator used in Key findings on New Zealand's progress using a sustainable development approach: 2010.

This indicator uses a moving line approach that sets the income thresholds as a proportion of median income from each Household Economic Survey. This provides a consistent time series with the 50 and 60 percent thresholds offering a comprehensive measure of the proportion of the population with low incomes.

Previously, a constant value approach was used that set a threshold at 60 percent of 2007 median household disposable income after housing costs. The threshold was adjusted for inflation to keep it fixed in real terms. Once the threshold moved too far from the original relative settings, the reference year had to be changed. This resulted in a discontinuity in the series.

A line graph replaces the column graph previously used in Key findings on New Zealand's progress using a sustainable development approach: 2010, to make it easier to interpret the trend.